SoftBank Posts First Quarterly Net Loss in Two Years, Swings to $7.1 Billion Deficit in Fiscal Q2 on AI Investment Fears
Summary
- SoftBank said it posted a $7.1 billion net loss in the second quarter as AI-related investment burdens grew and the value of key holdings declined.
- It said the value of SoftBank's investment assets fell as shares of Arm, Intel and Coupang declined, while the Vision Fund posted an 81.6 billion yen loss.
- SoftBank shares have fallen more than 50% since a record high in June, and concerns over borrowing for large-scale AI investments and policy uncertainty around AI and data centers weighed on investor sentiment.
Forecast Trend Report by Period
SoftBank Group posted its first quarterly net loss in about two years as the burden of artificial intelligence investments grew and the value of key holdings declined.
SoftBank recorded a net loss of 1.12 trillion yen, or about $7.1 billion, in its fiscal second quarter, cryptocurrency-focused media outlet BlockBeats reported on November 10. That marked a reversal from a profit a year earlier.
The earnings deterioration was driven in part by declines in major portfolio holdings. Shares of chip designer Arm, Intel and South Korean e-commerce company Coupang fell, reducing the value of SoftBank's investment assets.
Its Vision Fund unit, which manages stakes in hundreds of technology startups, also posted a loss of 81.6 billion yen during the same period.
The market also views SoftBank as a gauge of investor sentiment toward OpenAI and the broader AI industry. SoftBank shares have fallen more than 50% since hitting a record high in June.
Concerns about financing large-scale AI investments with borrowed money, along with growing policy uncertainty around AI and data centers after the U.S. midterm elections, also weighed on sentiment.
Minseung Kang
minriver@bloomingbit.ioBlockchain journalist | Writer of Trade Now & Altcoin Now, must-read content for investors.